Making money online with digital content is getting harder by the day if you believe the relentless tales of woe coming from corporate results in the publishing sector. As the barriers to entry come down for online publishers, the digital media space is a battleground where free content is having a major impact on profitable opportunities for traditional publishers.
There is a much discussed school of thought that says consumers expect the words and pictures that appear on a web page to be free, so charging for web content is a real challenge that many of the major publishers of the world have yet to crack. But those same consumers are more than used to the transactional habit of being asked to pay for magazines and books. And here lies the real secret to making money from publishing online: discovering the magic formula of just what people are prepared to pay for and what they are not. And here's a hint, it's not about word count, artistic style or even the amount of hard graft that's gone in to producing the content.
Existing magazine publishers have something that most digital / web-only producers crave… high quality, superbly written, credible editorial and quite often it's sitting in the archives or the rarely read pages of back issues gathering dust in storage. But so many of them have yet to recognise how best to put that information to work online. This presents an enormous opportunity for other publishers to move in and, figuratively, eat their lunch! So the question is, how can traditional magazine publishers utilise their best content via a paywall model?
How paywalls have evolved
The definition of what a paywall is has been pretty fluid over the past decade. It used to be viewed as a fairly rudimentary mechanism that required web users to pay up in order to access premium content on a publisher's site. There are hard and soft paywalls. The former requiring users to register and pay for access to any content, the latter requiring readers to pay up in order to access certain content, reports or restricted areas. Some publications make use of the paywall to include delivery of printed products, but for now, let's just say a paywall is any system that requires users (rather than advertisers) to contribute financially in return for digital-only content or services.
Two of the more well established paywalled publications would be the New York Times and the FT. That is, both titles utilised hard and soft paywalls well in advance of most other traditional print media of their size, as part of their online strategy. This brings about an interesting point to consider. If you adopt a paywall before your readers get used to the idea of having access to all of your content for free, does it make it easier for users to swallow when asked to stump up cash in return for high quality editorial? Or, more to the point, is it harder for a publication to adopt a paywall model if they've previously been giving away their best stuff for nothing, instead relying on advertisers to cover the expense of producing interesting, engaging copy?
In my experience, introducing a paywall when your frequent web readers have previously been given a free invitation to browse away without restriction is one tough challenge. Reader feedback tends to be largely negative. Users wonder, based on emails our editorial team received in the past, if their much loved magazine has run into financial problems, when they are suddenly asked to stump up money for something that used to be served up as an all-you-can-eat editorial buffet. Some even go as far as to make suggestions about contributing the occasional donation to cover costs (a model that is not quite paywall, but has been used successfully by some sites). The problem here is, quite simply, human nature. We don't like to be charged for things that used to be free and I don't see human nature changing significantly any time soon, despite the rapid evolution of online publishing models.
So, what to do?
My eureka moment
First, allow me to touch upon the first time I encountered a paywalled website that actually had me digging into my virtual wallet.
Watching a film one weekend, the picture suddenly turned black and white. I had assumed this was some arty director's decision to create a certain mood within the picture. It wasn't until the film had completed and I turned on Sky Sports News to realise that it too was now being broadcast in monochrome. Ever quick on the uptake, I reasoned that there was no real artistic merit in broadcasting the latest football transfer gossip in a 1960s TV style so I ever so quickly reached the correct conclusion that, to use a technical term, my TV had bust.
Before calling in the experts – and even before attempting to correct the problem myself using the time-honoured tradition of giving the goggle box a firm thump – I did what I normally do when faced with an annoying, but not life-threatening problem. I turned to Google.
Carefully typing in my TV's model number and the phrase 'suddenly gone black and white' I was pleasantly surprised to find a website appearing high in the search results that promised me the short, painless solution to my problem. I read the web page all the way to the bottom where I was presented with the opportunity to see the solution in exchange for a small (micro) payment to the website.
Clever. Very clever.
Of course, as already mentioned, I'm not so daft as to simply hand my cash over there and then, so I pressed my browser back button and tried to find my answer on any one of the free content websites that had appeared.
Faced with forums, discussions about the various merits of particular technical add-ons and generally a lot of noise, I didn't get what I wanted, which was a simple A,B,C set of instructions to help me fix my TV's picture problems. Back to the paywalled site I went and having handed over my cash I did indeed get my answer. It was roughly one hundred words of text. I had paid £3.50 for one hundred words of text. But those words gave me what I wanted and I felt very pleased to have saved myself having to watch a black and white TV until the following week whereupon I would probably have had to hand over significantly more than £3.50 to an engineer.
The simplicity of what I'd just seen really excited me, but the economics of the model were even more enticing. £3.50 for one hundred words? At the time, our entire magazine retailed at £2.95. Anyone who's ever worked on a magazine realises the time, expense and sheer hard work of putting out a high quality publication and yet here's a website that can charge the same amount in exchange for just one hundred words. Not just to me either. They could sell that valuable information over and over again, along with all their other solutions to pressing problems.
I don't think for a minute that the website I paid my cash to was the only site online that had the solution to my problem. What they did have though was a clean, simple and precise delivery of information, marketed directly to an audience who are / were willing to pay for that information.
Simple solutions to specific problems
Since then, we've adopted a similar paywall model for our titles. Simple, well edited solutions to specific problems that can't easily be found elsewhere. Our skill, as far as I'm concerned, is our ability to cut through the clutter and noise and provide web users with the confidence that if they pay us for an answer to a specific question, that's exactly what they'll get.
There are people who want to discuss issues, to debate various solutions to various problems and weigh up the merits of several ways of achieving the same goal. In fact, we even have (or should I say, had) a large, very popular forum where people can talk about issues until the cows come home and I'm constantly amazed at just how much incredibly valuable information is shared. Yes, the sort of information that many people would happily pay for. It is only from understanding that this method of gaining knowledge and information is simply not the favoured approach of all web users. There are plenty of people who don't want or need to discuss, they just want their information to be credible, effective and to give them a solution to a problem.
It's my view that if you want to introduce a paywall, you can't simply run around your website erecting velvet rope, restricting access to areas that people are used to wandering around for free. It's a really hard sell and most likely doomed to fail, even creating bad will amongst users who, quite frankly, don't have any 'right' to expect high quality, well-edited information for free. That is, if those same users aren't paying the bills by way of advertiser interaction and, if publishing statistics are to be relied on, there really aren't that many sites who can claim to be making healthy profits through advertising alone.
What traditional publishers have in abundance is high quality information. The best way to leverage that information via a paywall, in my view, is to introduce premium content products that can successfully answer ‘yes’ to these three questions:
1. Does this content / information simply and effectively answer a question that could either make or save somebody money or time?
2. Is this content not freely and easily available from lots of other sources?
3. Am I pricing my content at a level where the user will feel they are getting a genuine ROI?
There are lots of paywalled sites using a whole variety of different methods. We've played around with nearly all of them. Our findings have been conclusive. Readers will happily pay for information provided it is positioned to answer a question that is not readily available elsewhere, provided there is an ROI for the reader (either time saved, money saved or useful knowledge gained) and on the proviso that they are not simply being denied access to content because the publisher has suddenly drawn up the barriers to access to everything, particularly if they were previously getting in for free.